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State of the State: 2025 vs 2026
Governor Josh Green -- comparing priorities year over year
Governor Green's 2026 State of the State address represents a maturation from ambitious goal-setting to a more defensive, values-driven posture, shaped significantly by the impact of federal funding cuts on Hawai'i's economy. While the 2025 address was a forward-looking agenda organized around bold numerical targets and new program launches, the 2026 speech is more narrative-driven, laced with personal stories of individual beneficiaries (Julia, Jade, Zoe), and focused on protecting gains already made rather than announcing major new initiatives.
The most consequential policy shift is on affordability and taxation. In 2025, Governor Green celebrated the "largest income tax cut in Hawai'i's history, providing $5.6 billion in relief over seven years" as an unqualified achievement. In 2026, he proposes pausing the tax cuts planned for 2027–2029, recapturing an estimated $1.8 billion to offset a $3 billion shortfall caused by federal spending cuts. He pledges that $600 million of the recovered funds must go toward food security and child care — a significant new earmark that reflects a pivot toward safety-net spending over broad-based tax relief.
Economic diversification and jobs received substantially more attention in 2026. The 2025 address barely mentioned the economy beyond housing and affordability, whereas the 2026 speech dedicates an entire section to jobs and economic growth, highlighting Hawai'i's third-lowest unemployment rate nationally, GDP and personal income forecasts, and specific proposals like removing the film tax credit cap for productions spending $60 million or more, expanding construction apprenticeships tied to housing projects, and supporting organizations like Kupu whose federal AmeriCorps funding was frozen.
The environment section evolved from a brief mention of Red Hill and climate advisories in 2025 to a centerpiece achievement in 2026 — the passage of the nation's first "Green Fee," a 0.75% TAT increase generating over $100 million annually for climate action, conservation, and resilience. The 2026 speech also highlights over 600 community proposals for environmental projects, an environmental advisory council led by Jeff Mikulina, and expanded wildfire prevention sensor networks. Meanwhile, public safety — including gun safety laws, gun buyback events, and the Illegal Fireworks Task Force — disappeared entirely from the 2026 address, as did any mention of stadium modernization or justice system reform.
Healthcare policy shifted from program launches to fiscal defense. In 2025, the HELP loan repayment program and Medicaid rate increases were highlighted as new achievements. In 2026, the governor announces $16.5 million in the state budget to backstop ACA enhanced tax credits in case federal subsidies expire, and celebrates securing nearly $190 million in federal funds for the Rural Health Transformation Program, projected to bring nearly $1 billion over five years to modernize rural care. The tone moved from building a new system to protecting vulnerable populations from federal rollbacks.
New Priorities in 2026
- +Proposal to pause income tax cuts planned for 2027–2029, recapturing $1.8 billion to offset a $3 billion shortfall caused by federal spending cuts, with $600 million earmarked for food security and child care.
- +Explicit focus on food security including SNAP benefit protection ($250 one-time temporary benefit per recipient during the federal shutdown), Sun Bucks summer food benefits for children, expansion of SNAP matching programs, and regional kitchens and food hubs.
- +Expanded school meal coverage reaching over 11,000 students in need, with plans to extend eligibility to families earning up to 300% of the federal poverty level.
- +Jobs and economic diversification section including proposals to remove the film tax credit cap for productions spending $60 million or more, expand construction apprenticeships tied to housing projects, and create public-private workforce pathways in healthcare, energy, and education.
- +The nation's first 'Green Fee' — a 0.75% TAT increase generating over $100 million annually for climate action, conservation, and resilience, guided by an environmental advisory council and over 600 community proposals.
- +State commitment of $16.5 million to backstop enhanced ACA tax credits for Hawai'i residents in case federal subsidies expire.
- +Announcement of nearly $190 million in federal funds for the Rural Health Transformation Program, projected to bring nearly $1 billion over five years to modernize rural healthcare.
- +Expansion of pre-school access statewide to reduce childcare costs, credited to Lt. Governor Sylvia Luke.
- +Plan to convert short-term rentals back into housing for local families, targeting at least 10,000 additional homes through county partnerships.
- +Announcement of Phase 2 of the 99-Year Leasehold Program on O'ahu and continued redevelopment of Mayor Wright Homes through Ka Lei Momi.
- +Acknowledgment of domestic conflicts on the mainland (specifically Minnesota) and a call for peaceful engagement — a notable departure reflecting heightened national political tensions.
Dropped from 2025
- −Public safety initiatives including two gun safety laws designating sensitive places, active-shooter training in schools, gun buyback events collecting approximately 1,000 firearms, and the Illegal Fireworks Task Force that seized 227,000 pounds of fireworks.
- −Stadium modernization was mentioned as a transformative project in 2025 but received no mention in 2026.
- −Justice system enhancements referenced in the 2025 closing were absent from the 2026 address.
- −Youth climate advocacy partnerships specifically mentioned in 2025 (partnering with youth advocates to champion emissions reductions and sustainable transportation) were replaced with broader conservation stewardship language.
- −Climate Advisory Team recommendations were referenced in 2025 but replaced in 2026 by the new environmental advisory council led by Jeff Mikulina.
Shifted Emphasis
- ↔The income tax cut shifted from being celebrated as a $5.6 billion achievement in 2025 to being partially walked back in 2026, with the governor proposing to pause 2027–2029 cuts to recover $1.8 billion for critical services amid federal funding losses.
- ↔Housing policy moved from emphasizing emergency proclamations and the $500 million budget request in 2025 to highlighting concrete outcomes (5,500 entitled units, 6,500 units online, 2,500 DHHL homestead leases) and new strategies like short-term rental conversion and workforce housing on state lands in 2026.
- ↔Homelessness targets evolved from a goal to 'cut homelessness in half by 2026' to a more specific goal to 'cut chronic homelessness in half by end of 2026 and in half again in the next four years,' with kauhale villages growing from 17 open (30 planned) to 25 open (30 planned by year-end).
- ↔Healthcare shifted from launching the HELP program and raising Medicaid rates in 2025 to a defensive posture in 2026 focused on protecting ACA subsidies ($16.5 million state backstop) and securing federal rural health funds ($190 million), while still expanding HELP.
- ↔Maui recovery evolved from broad dollar figures ($2 billion federal, $800 million state) and 99% housing placement in 2025 to more specific commitments in 2026: another 1,200 interim housing units, construction pathways for 2,200+ permanent homes including 685 affordable units, rent support extended into 2027, and explicit cultural preservation of Lahaina.
- ↔Environmental policy grew from a brief section about Red Hill closure and climate advisory recommendations in 2025 to a major section in 2026 featuring the Green Fee ($100 million annually), 600+ community proposals, expanded wildfire prevention, and agricultural land use protections.
- ↔The overall rhetorical approach shifted from an optimistic agenda-setting tone in 2025 to a more defensive, federally-aware posture in 2026, with repeated references to federal cuts removing $3 billion from Hawai'i's economy and the need to protect state services and safety-net programs.
Policy Topics Addressed
Affordability
Governor Green centered much of his address on affordability, noting Hawaii's highest housing costs in the nation. He doubled the earned income and food tax credits, delivered the largest income tax cut in state history, and expanded free childcare and school meals. He reported tracking over 62,000 housing units including 46,000 affordable homes. He proposed pausing future tax cuts planned for 2027-2029 to recover $1.8 billion for critical services after federal cuts, while preserving all existing tax relief. He also committed $16.5 million to cover ACA subsidies threatened by federal inaction.
Agriculture
Governor Green discussed expanding land use for local agriculture and ranching, protecting critical pasturelands, and strengthening the statewide food security plan by expanding regional kitchens and food hubs. He also highlighted the state's commitment to making local produce more accessible through SNAP matching programs.
Economy & Jobs
Governor Green reported Hawaii has the third-lowest unemployment rate in the nation, with GDP 5% higher in 2025 than 2019 and record visitor spending per traveler. He emphasized economic diversification through healthcare, conservation, construction, and creative industries, and proposed expanding stackable film tax credits including removing the cap for productions spending $60 million or more.
Education
Governor Green highlighted improvements in kindergarten readiness, noting over 70% of kindergartners are now on track in key developmental areas according to a UCLA study. He cited a 6-week intensive tutoring program that served 17,000 students and produced an 8% jump in literacy proficiency. He announced the goal of reaching the national 87% average high school graduation rate, up from the current 80% highest rate in 15 years.
Environment & Energy
Governor Green highlighted Hawaii's transformational energy plan to reduce dependence on oil and transition to fully renewable sources while reducing energy costs. He noted the successful removal of 104 million gallons of fuel at Red Hill and announced the nation's first 'Green Fee' generating over $100 million annually for climate action and conservation. He emphasized Hawaii's vulnerability to climate change with stronger storms, coastal erosion, and drought.
Government Reform
Governor Green focused on government efficiency in disaster response, noting the state provided over 6,800 temporary housing solutions for Maui fire survivors. He emphasized reducing spending by $1 billion in 2023 and another $500 million in 2024 without cutting needed services, while growing the rainy day fund to $1.5 billion.
Healthcare
Governor Green, himself an ER doctor, announced nearly $190 million in federal funds for the Rural Health Transformation Program and committed $16.5 million in state funds to cover enhanced ACA tax credits. He highlighted the Healthcare Education Loan Repayment Program (HELP) covering over 900 providers, raised Medicaid rates for nearly 400,000 people, and described the state's approach of treating 'housing as healthcare' for the homeless, noting a 76% reduction in healthcare costs when unhoused individuals receive permanent housing.
Housing
Governor Green made housing one of his top priorities, reporting dramatic progress since taking office. He cited emergency housing proclamations that approved over 10,000 new low-income housing units, entitled over 5,500 affordable units, and brought more than 6,500 affordable units online. He announced tracking over 62,000 housing units across 250+ projects statewide including 46,000 affordable homes. DHHL granted more than 2,500 homestead leases in 2025 — the most in its 100-year history — growing to 7,000 in 2026. He also pledged to return more short-term rentals to local families, targeting at least 10,000 additional homes.
Infrastructure
Governor Green highlighted the safe removal of 104 million gallons of fuel at Red Hill to protect water infrastructure, and detailed the Maui recovery effort including a $500 million interim housing plan with over 3,000 housing units. He also emphasized the state's energy transformation plan to transition to fully renewable sources while reducing energy costs, and securing nearly $190 million in federal Rural Health Transformation funds to modernize rural healthcare infrastructure.
Public Safety
Governor Green did not make public safety a central focus of his address, concentrating instead on cost of living, housing, homelessness, and healthcare. His public safety references were limited to emergency response and disaster preparedness following wildfires and typhoons.
Social Services
Governor Green detailed one of the most comprehensive social services agendas, including universal free childcare from birth to age 12 (the first state to offer this), expanded SNAP matching programs, and the Sun Bucks summer food benefit. He committed $50 million annually for kauhale villages to reduce homelessness and reported a 76% reduction in healthcare costs for formerly homeless individuals placed in housing. He also proposed $16.5 million to cover ACA tax credits to maintain affordable health coverage.
Tax & Budget
Governor Green proposed pausing tax cuts planned for 2027-2029 to recover $1.8 billion for critical services impacted by federal cuts, while preserving all current and previous tax cuts. He highlighted the largest income tax cut in state history enacted during his tenure, doubling the earned income tax credit and food tax credit, and growing the rainy day fund to $1.5 billion. He proposed $600 million of the recovered funds must go to food security and childcare needs.
Technology
Governor Green discussed expanding film tax credits to include streaming service productions for the first time and removing credit caps for large productions spending $60 million or more. He also mentioned deploying wildfire and wind sensors statewide for early alert capabilities and using technology to transform healthcare delivery through telehealth and Food is Medicine programs.
Veterans & Military
Governor Green highlighted the Healthcare Education Loan Repayment Program (HELP) providing loan repayment for over 900 providers statewide, which benefits veteran communities through improved healthcare access. He also proposed $16.5 million to cover enhanced ACA tax credits for Hawaii families, including veterans, and highlighted nearly $1 billion in rural health transformation funding over five years.